27 June 2017
Toronto and New York
Mountain Province Diamonds Inc. (“Mountain Province”, the “Company”) (TSX and NASDAQ: MPVD) today announces the results of its recently completed fifth diamond sale.
Sale 5 included $US21.1 million proceeds from sales of 222,000 carats (US$ value per carat: $95).
Diamonds sold at individual sale events will not directly reflect run-of-mine production from specific processing periods. The timing of the sale of some goods may be accelerated or deferred for tactical marketing purposes. Realized average value per carat is also impacted by the binary nature of the fancies and specials bidding process within each production split, conducted approximately every five weeks with the Company’s joint venture partner, De Beers Canada Inc. The winning party of each fancies and specials bid then markets 100% of those diamonds.
The results from the fifth sale are elevated in part from the inclusion of a selection of the fancies and specials won by the Company otherwise scheduled for inclusion in the sixth sale, which will occur in the second half of July. Excluding these high value diamonds, the average value realized per carat was US$75. This reflects the finer size and lower quality distribution of this particular sales offering, as the Company indicated in May would be the case in connection with its first quarter reporting.
Nonetheless, this fifth sale represents the Company’s strongest sale performance to date. Very positive prices were realized on the fancies and specials, and prices realized on the remainder of the offering also exceeded expectations. The financial result was matched by several strong performance measures, including the number of buyers attending, the number of attendees placing bids and the average number of bids per lot. Said Reid Mackie, the Company’s Vice President Diamond Marketing, “The June tender sale was our best attended to date and produced a record number of bids. Repeat customers won 75% of lots, indicating that the rough market’s understanding of our diamonds’ performance at manufacturing is positive and well on track.”
Said David Whittle, the Company’s Interim President and Chief Executive Officer, “With the winterization improvements successfully completed, the mine has made good progress in catching up on production tonnage relative to plan. As a result, and combined with the notably positive recovered grade performance, year-to-date carat production has fully caught up to plan. Given the positive experience in our diamond marketing efforts, the trend leading in to the second half of our first year of production is encouraging.”
Operationally, ore production rates have been strong, the diamond processing plant is functioning at and above nameplate capacity, and total production costs to date are broadly consistent with budget. Regarding pit operations, the mine operator, De Beers Canada, has advised that for geotechnical reasons a push-back of the east wall of the 5034 pit is required, and initial work on that push-back has now commenced. While the operator has not yet determined the full cost impact, it is expected that the main effect will be spread over the next three years. Further information will be provided once the determination has been completed.
As previously disclosed, the Company declared the commencement of commercial production on March 1, 2017. The Company will report its first mine revenues and gross margins in its second quarter financial results, reflecting the sale of March production under this fifth diamond sale event. Second quarter financial results are expected to be released on or about August 10, 2017.